[plug] News IT on IT budget shakeup

[bob]

Maybe its time for a letter writing campaign to MPs on the fiscal 
responsibility of OSS ?


Governments slash tech
Simon Hayes
SEPTEMBER 16, 2003
TECHNOLOGY providers are gearing up for a huge shake-up in the Western 
Australian Government's $300 million IT budget.

The state is likely to drop many major vendors as it forces departments to 
save money by sharing services.

The state's Functional Review Taskforce -- charged with stripping up to $50 
million a year from the public service and eliminating what Premier Geoff 
Gallop has called "waste and duplication" -- has set its sights on IT.

The move comes as several other states review technology spending. One of 
the more biggest changes is in South Australia, where the Government is 
breaking up its outsourcing contract with EDS.

The taskforce has grouped WA agencies into five clusters, with two -- health 
and education -- already identified. Each cluster will include 20-30 
agencies sharing finance and human resources services, including software.

The three clusters yet to be announced are understood to be police, planning 
and infrastructure and justice.

The review is unlikely to have any effect on the state's existing 
outsourcing contracts, which have recently been re-let to a variety of 
providers.

Functional Review team executive director Ron Mance said "high-volume 
generic processing" was the area where most savings would be made.

"There will still be a requirement for other systems that meet the business 
needs of specific agencies," he said.

"There is also a capacity for clusters, once announced by government, to 
identify additional services that are better done centrally."

The review is likely to pitch Oracle and PeopleSoft -- already avowed 
enemies in the corporate sector -- into open warfare over government work.

Oracle is dominant in WA, but PeopleSoft also has big contracts there.

The two clusters already identified reflect that conflict, with the WA 
Health Department running PeopleSoft, while the Education Department uses 
Oracle. The Government is also planning to use its size to squeeze 
discounts out of hardware providers. A review notes that purchasing of PCs 
is one area where whole-of-government procurement could be useful.

"By co-ordinating the buying for the whole of government, and placing, say, 
four orders a year of 5000 PCs each time, we should make savings," the 
report says.

Software and hardware providers could find times tough, but while there 
would be some rationalisation among service providers, the outlook is more 
positive.

"Everyone has been looking at this and saying they only need two to three 
financial systems," CSC WA leader Bruce Dinsdale said.

"They reckon they can save money. For economies of scale, there's no point 
in having seven to eight. It's nuts. p/> "There will be fewer vendors, but 
if you are a service provider there will still be room to play."Competitor 
Unisys West runs a major data centre in Perth providing hosting for 
government Oracle and PeopleSoft applications,

"The impact of this review will be significant," chief executive Murray Rosa 
said.

"They're talking about cutting costs and looking at what can be 
rationalised."

The government is understood to be reconsidering its telecommunications 
needs separately from the review.

Despite the threat of cutbacks, enterprise software vendors are not exactly 
quaking in their boots.

"We understand the review is at a very early stage," PeopleSoft managing 
director David Webster said.

"It will be followed by them engaging various organisation for expressions 
of interest."


-- 
The early bird who catches the worm works for someone who comes in late
and owns the worm farm.
		-- Travis McGee

_______________________________________________
plug mailing list
plug at plug.linux.org.au
http://mail.plug.linux.org.au/cgi-bin/mailman/listinfo/plug